The 3′ untranslated region (3′UTR) plays a crucial role in determining mRNA stability, localisation, translation and degradation. Cap analysis of gene expression (CAGE), a method for the detection of capped 5′ ends of mRNAs, additionally reveals a large number of apparently 5′ capped RNAs derived from locations within the body of the transcript, including 3′UTRs. Here, we provide direct evidence that these 3′UTR-derived RNAs are indeed capped and widespread in mammalian cells. By using a combination of AGO2 enhanced individual nucleotide resolution UV crosslinking and immunoprecipitation (eiCLIP) and CAGE following siRNA treatment, we find that these 3′UTR-derived RNAs likely originate from AGO2-binding sites, and most often occur at locations with G-rich motifs bound by the RNA-binding protein UPF1. High-resolution imaging and long-read sequencing analysis validate several 3′UTR-derived RNAs, showcase their variable abundance and show that they may not co-localise with the parental mRNAs. Taken together, we provide new insights into the origin and prevalence of 3′UTR-derived RNAs, show the utility of CAGE-seq for their genome-wide detection and provide a rich dataset for exploring new biology of a poorly understood new class of RNAs.